Beckett’s labour reforms shift balance of power

The Fairness at Work white paper will create extra burdens for large and small engineering employers. Scant attention was paid in discussion of the white paper released last week about the powers of a ‘restructured and reinforced’ Central Arbitration Committee to take over from ACAS, the ineffectual Advisory Conciliation and Arbitration Service. But under Labour’s […]

The Fairness at Work white paper will create extra burdens for large and small engineering employers.

Scant attention was paid in discussion of the white paper released last week about the powers of a ‘restructured and reinforced’ Central Arbitration Committee to take over from ACAS, the ineffectual Advisory Conciliation and Arbitration Service.

But under Labour’s industrial relations regime the CAC looks set to become a familiar acronym.

The white paper, to be followed by legislation next year after further consultation, boasts of creating a ‘new culture of partnership at work’ and Prime Minister Tony Blair claimed Britain will still have the ‘most lightly regulated labour market of any leading economy in the world’.

This is true up to a point. The white paper’s extension of maternity leave to 18 weeks and introduction of parental leave are in line with international standards and should not be too disruptive for employers.

But what trade and industry secretary Margaret Beckett failed to point out at the launch of the white paper is that legislating for greater ‘equality’ between capital and labour necessitates a powerful independent umpire. The lesson from countries with similar systems is that the umpire is forced into a pivotal role in labour disputes.

The CAC’s remit is wide. It is the body to which unions will turn when employers refuse to agree with the composition of proposed bargaining units workforce groups for collective agreements and when employers refuse to agree with issues for bargaining.

The CAC will define ‘appropriate’ bargaining units and can ‘impose a legally binding procedure setting out how the parties are to bargain… bargaining will cover pay, hours and holidays as a minimum’.

Employers or unions ignoring the CAC’s findings can be referred to ‘a court’ where all parties will need to be represented and failure to comply with a court order to enforce bargaining procedures will be a contempt of court.

The CAC will, however, be able to dismiss frivolous claims and must ensure it does not inhibit trade. But the danger is that unions wanting to make inroads in firms with more than 20 employees will be able to force company representatives to attend at the CAC simply by filing a claim.

Engineering Employers’ Federation employment affairs head David Yeandle says there will be ‘high-profile cases’ where companies and unions lock horns.

‘The question of how the CAC works is clearly important,’ he said. ‘We hope the Government will ensure it has people who have some legal background.’

Even the 65% of UK engineering firms already working co-operatively with unions may find existing agreements in jeopardy by unions knocking on the doors of the CAC for a new deal. Companies will have no choice but to turn up and defend themselves or risk having a CAC-imposed solution they might not want.

‘The employer will be under a legal duty to co-operate,’ the white paper says.

The CAC will administer postal ballots for union recognition, to be decided by a majority of those voting, and at least 40% of eligible voters in a bargaining unit.

A TUC spokesman welcomed consultation to refine the role of the CAC. But neither employers nor unions are entirely happy with the proposed arrangement. Unions have complained that the 40% limit breaches Labour’s manifesto, but the result is relatively lenient. Australia’s industrial relations system, for example, has always required 50% support from the entire workforce for approval of any collective deal.

On the other hand, UK employers have expressed annoyance that they will have to pay half the cost of workplace ballots.

There is no mention in the white paper of what happens if parties cannot resolve a collective agreement after the CAC has forced them to spend substantial sums getting to the bargaining table.

There is also no mention of penalties for defying the CAC, nor of appeal rights, nor exactly how the Government proposes to ensure the CAC’s impartiality.

Much is still to be decided, including the role of the CAC or the courts in preventing long strikes. Protection for employees from being sacked while on strike also has to be negotiated.

And what of the other elements of the white paper? Unions will be left to sort out rows over coverage of workers among themselves, but legal guidelines are likely to be needed to prevent union rivalry getting out of control.

Yeandle says the EEF’s main aim is to mitigate the impact of a new right for individual employees to be accompanied by a union representative during grievance and disciplinary procedures at work.

This will frustrate and delay many managers and the EEF wants it limited to cover serious issues only preferably just dismissal matters.

Removing the £12,000 cap on unfair dismissal payouts and halving the two-year qualification period before an employee can claim unfair dismissal will also cost companies more and lead to increased claims against them.

Graduates and managers looking for a career boost could do worse than take a degree specialising in employment law and join the queues of lawyers who will charge firms substantially to protect their interests at the CAC.